With the extension of the investment tax credit, previously set to expire at the end of 2016, solar developers get renewed incentives. Ultimately, the solar users are. The Federal Solar Tax Credit, also known as the investment tax credit (ITC), allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes. The ITC applies to both residential and commercial systems.
A Brief History
The federal tax credit was established by The Energy Policy Act of 2005, for residential energy property. Initially it was applied to solar-electric systems, solar water heating systems and fuel cells. The Energy Improvement and Extension Act of 2008 extended the tax credit to small wind-energy systems and geothermal heat pumps. The credit was further enhanced in February 2009 by The American Recovery and Reinvestment Act of 2009, which removed the maximum credit amount for all eligible technologies (except fuel cells) placed in service after 2008.
The Consolidated Appropriations Act, signed in December 2015, extended the expiration date for solar thermal technologies, and introduced a gradual step down in the credit value for these technologies.
A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed.
The Solar Investment Tax Credit is one of the most important federal policy mechanisms to support the deployment of solar energy in the United States. This has a very positive impact to promote the awareness and growth of solar energy regime. People are more and more inclined towards the installation of solar power source big or small, industrial or domestic.
The brief tax credit story for six and beyond years is as follows:
- 2016 – 2019: The tax credit remains at 30 percent of the cost of the system. This means that in 2017, you can still get a major discounted price for your solar panel system.
- 2020: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their taxes.
- 2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
- 2022 onwards: Owners of new commercial solar energy systems can deduct 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.
In the solar energy industry at present, Solatube is the ONLY skylight that qualifies for 26% Federal Tax Credit.
As long as you own your solar energy system, you are eligible for the solar tax credit. They say that to qualify for the 30% federal Residential Renewable Energy Tax Credit, you must meet all of the following requirements:
- Your system must be installed by December 31, 2019.
- You must own your property.
- You must pay enough taxes to the Federal Government to qualify for the 30% tax credit.
For that ultimate customer whether domestic or commercial, Solatube qualifies everything written below:
Solatube skylight has been the leader in providing sun light at your home and industry.
It is the most reliable service and after sale service provider company.
Has an enhanced technology to address all your issues.
It fulfills complete criteria of Federal Tax Network.
All legal formalities accomplished.
*Disclaimer: Solatube International and The Solar Guys are not tax advisors. Taxpayers claiming a tax credit should consult a tax professional with any questions. Solatube International and The Solar Guys are not responsible or liable for the taxpayer’s ability to receive tax credits. This document is not intended to constitute legal or tax advice. More comprehensive information will be made available by the IRS.